The Campaign Finance Institute is now a Division of the National Institute on Money in Politics

Newly Released:

Small-Donor Matching Funds for New York State Elections: A Policy Analysis of the Potential Impact and Cost

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There is every reason to believe campaign finance reform will be high on the agenda for the New York State Legislature in 2019. The state’s governor, Andrew Cuomo has proposed small-donor matching fund programs since he took office in 2011, but his proposals have foundered in the Republican-led Senate. After the 2018 election put Democrats in a majority in both chambers, the Assembly and Senate will each have as its leader someone who has been on record as a sponsor of small-donor matching funds. While nothing can ever be certain, the odds clearly have changed.

The main proposals would reduce the state’s high campaign contribution limits, eliminate a glaring contribution loophole used by limited liability corporations (LLCs), and introduce a small-donor matching fund system for state elections modeled after the successful one in New York City. The goal would be to combat corruption and the appearance of corruption by making the state’s elected officials less dependent on large donors while heightening the connections between them and their less wealthy constituents.

CFI’s analysis is based on reports that candidates filed with the New York State Board of Elections through November 2018, after the records were processed and standardized by the National Institute on Money in Politics (NIMP). The analysis will be updated when final 2018 reports are filed at the end of January, and as newly revised legislative bills are filed in 2019.

The Campaign Finance Institute (CFI) is a nonpartisan and rigorously objective research institute founded in 1999. In 2018 CFI became part of the equally nonpartisan and objective National Institute on Money in Politics. Michael J. Malbin was co-founder and remains the director of CFI. He is also a Professor of Political Science at the University at Albany (SUNY). Brendan Glavin is CFI’s data and systems manager.

The key findings in the report are these:

Lowering the contribution limits, closing the LLC loophole, and instituting a system of matching funds, would in fact substantially increase the importance of small donors to candidates across the board while decreasing their dependence on large donors.

Virtually every candidate in the system, with a few major exceptions, would be better off financially under the proposed system than under the status quo.

The cost of the proposed system would be modest – less than one penny per day for each New Yorker over the course of four years.

The one major problem with the proposal as currently drafted is that the requirements to qualify for matching funds are set too high for most candidates. Without an adjustment, many would not benefit as intended. However, a simple adjustment would correct the problem fully.

In 2010, the U.S. Supreme Court in Citizen United v. FEC paved the way for mega-donors to underwrite independent spending. In that same year, in a decision that dealt a setback to one feature in some Clean Elections-style systems, the Supreme Court upheld public financing more broadly. Since these cases local governments in Washington DC, Baltimore (Maryland), Montgomery County (Maryland), Howard County (Maryland), Prince George’s County (Maryland), Suffolk County (New York), Seattle (Washington), and Denver (Colorado) have taken steps to enact or implement new matching fund or voucher systems. New York City and Los Angeles have upgraded theirs. Washington State narrowly turned back a referendum for vouchers in 2016. South Dakota adopted a voucher referendum in 2016 only to have it reversed by the legislature in 2017.

Despite all of this action, no state has adopted and successfully implemented a public financing system for gubernatorial and legislative elections since Connecticut in 2006. New York’s would be the first new system statewide since Citizens United. If adopted, it would surely be taken as a signpost by others.

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PRACTICAL AND OBJECTIVE RESEARCH FOR DEMOCRACY

The Campaign Finance Institute, a division of the National Institute on Money in Politics, is the nation’s pre-eminent think tank for objective, non-partisan research on money in politics in U.S. federal and state elections. CFI’s original work is published in scholarly journals as well as in forms regularly used by the media and policy making community. Statements made in its reports do not necessarily reflect the views of the National Institute on Money in Politics' Directors or financial supporters.